15th Finance Commission’s Term Extended, Final Report By October-End Next Year

The Union Cabinet extended the term of 15th Finance Commission to submit its final report covering its suggestions for financial years 2021-22 to 2025-26 by Oct. 30, 2020.

The commission would submit an interim report soon covering its suggestions for 2020-21 so that these can be used for the next year’s budget. Headed by NK Singh, the 15th Finance Commission had to submit its suggestions for the five-year period commencing April 2020.

But it could not complete its recommendations as Jammu & Kashmir was split into two union territories, and the J&K Reorganization Bill stated that distribution of taxes to the state to be apportioned to union territories of J&K and Ladakh, making the panel’s job complex.

“The extension of the term will enable the commission to examine various comparable estimates for financial projections in view of reforms and the new realities to finalise its recommendations for the period 2020-2026,” said a statement by the government.

The panel has already prepared its interim report covering suggestions for 2020-2021 and has sought time from the President to submit the findings, a government official aware of the panel’s deliberations said on the condition of anonymity as the details are not public yet.

This is not the first time when an interim report will be submitted to the government. The 9th Finance Commission had submitted two reports to the government—the first covering the one-year period from April 1, 1989, and the second covering a period of five years from April 1, 1990.

The government’s statement said the 15th Finance Commission’s coverage of five years starting April 1 will help both state and central governments design schemes with medium- to long-term financial perspective and provide “adequate time for mid-course evaluation and correction”.

Other Cabinet Decisions

• The Cabinet Committee on Economic Affairs approved increase in authorised capital of Food Corporation of India to Rs 10,000 crore from existing Rs 3,500 crore. The government will now be able to infuse additional capital in FCI through Union Budget to fund foodgrain stock. The move will help cut borrowings of the company, save interest costs and reduce food subsidy.
• Cabinet approved waiver of loan worth Rs 4.24 crore of Sikkim Mining Corporation.
• To boost the jute sector, the union cabinet approved mandatory packaging of 100 percent foodgrain and 20 percent sugar i jute material for the jute year 2019-20.